Lexeo files $100m IPO in tough listing environment

Genetic medicine specialist Lexeo Therapeutics is the latest biotech to line up an initial public offering (IPO), aiming to raise around $100 million from the transaction.

Shares in the company – of which around nine million have been issued at $11 apiece – are due to start trading on the Nasdaq later today under the LXEO ticker.

The offer price is $2 below the low end of the range that Lexeo was pushing for but is nevertheless a welcome sign of activity in the life sciences IPO category, which has been retreating from record levels in 2021 and 2021 – at the height of the pandemic – blocking off a key source of funding for start-ups.

So far this year, there have been just over a dozen biotech IPOs, well below even pre-pandemic levels, and most new entrants have struggled to maintain their initial valuations.

Lexeo focuses on adeno-associated virus (AAV) gene therapy technologies that grew out of the labs of Weill Cornell Medicine researcher Ronald Crystal, the biotech’s founder and chief scientific advisor.

The company’s lead programme, LX2006, aims to treat cardiomyopathy in Friedreich’s ataxia, a debilitating and life-shortening neuromuscular disorder, and is in the phase 1/2 SUNRISE-FA trial with results due in mid-2024. It has earmarked $45 million of its proceeds for this programme.

A second candidate, codenamed LX2020, is for the treatment of plakophilin-2-related arrhythmogenic cardiomyopathy (PKP2-ACM), an inherited heart disease caused by mutations in the PKP2 gene that causes life-threatening arrhythmias and raises the risk of sudden cardiac death. That is in line for $40 million in funding.

Following behind that is an Alzheimer’s disease gene therapy targeting APOE4, a risk factor for the neurodegenerative disease, which is also in a phase 1/2 study with a readout expected before the end of next year. $10 million has been set aside to fund that trial through to its conclusion.

LX1001 delivers the APOE2 protein, which is thought to be protective against the harmful effects of APOE4, and is being tested in people with two copies of the APOE4 mutant gene with symptoms ranging from mild cognitive impairment to mild or moderate dementia due to Alzheimer’s. Two follow-up candidates are also in preclinical development.

In the summer, Lexeo received an undisclosed strategic investment from Sarepta Therapeutics to support its AAV-based gene therapy programmes in cardiovascular diseases, with a focus on cardiomyopathy.

It previously raised $100 million in a Series B financing and $85 million in a Series A, both concluding in 2021, and currently around $45 million in cash reserves, according to its IPO prospectus.